Reliance on Management Forecast: An Evaluation of the Impact of Review and Accuracy
|Keywords:||公司財務預測的信賴性;公司財務預測核閱;財務預測準確性;Review of Management Forecast;Accuracy of Management Forecas;Reliance on Management Forecast||Issue Date:||2004||Abstract:||
This thesis examines whether (1) auditor’s review of management forecast and (2) historical record of management forecast accuracy will affect investors’ reliance on management forecast. Adopting a laboratory experimental approach, this study involves presence of auditor’s review and accuracy of past management forecast (both are between-subjects factors) and presence of historical record of management forecast accuracy (within-subject factor) as the independent variables, and investor’s reliance on management forecast as the dependent variable. Accuracy of past management forecast is manipulated at three levels, including accurate, overestimated, and underestimated, and investor’s reliance on management forecast is measured by the ratio of investor’s belief in earnings (and gross margin) after reading management forecast to management forecast of earnings (and gross margin).
The subjects in this experiment are 93 practitioners who attend an executive development program at a university. They are randomly assigned to the experimental conditions as mentioned above and serve as the role of investors. The results indicate that when investors are not provided with past record of management forecast accuracy, presence of auditor’s review of management forecast will increase investor’s reliance on management forecast. When investors are provided with past record of management forecast, the review function becomes insignificant in affecting investor’s reliance on management forecast. Accuracy of past management forecast significantly affects investor’s reliance on management forecast. Investors adjust management forecast downward when past forecast is overestimated, and adjust upward when past management forecast is underestimated with the magnitude of the former greater than the latter. The findings may have implications for the government in setting policies regulating management forecast. Limitations of this study are also discussed.
|Appears in Collections:||會計學系|
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